AEP CEO Mike Morris: Electrify the Economy
April 14 2009 by Jennifer Pellet
In his 2005 book, The Bottomless Well, Peter Huber explained how
Mike Morris, CEO of Columbus, Ohio-based American Electric Power (
Further, if the electrification of cars is to be practical it will utilize power plant facilities 24/7, running them in off-peak hours, recharging batteries while one’s car is parked. The strain on electric power will be such that electricity will need to be transported longer distances and from where it is relatively cheap to places where demand is greatest at different times of the day. The existing transmission is not up to this task without severe problems. Yesterday’s typical high voltage technology energy delivery system loses about 7 to 8 percent of the energy that is generated to the point of delivery. However, modern conducting, metallurgy and computer control on the flow of energy down the transmission grid reduces those line losses to less than 1 percent.
Prior to joining
Before we talk about the need for a backbone for the national grid, it’s hard to find anyone who can say anything nice about the current grid. Former energy secretary Bill Richardson called it “a third-world grid.” The president of the American Civil Engineers group said most of the equipment is very old. And the president of the Brotherhood of Electrical Workers said a lot of this stuff is so antiquated that if we don’t do something to fix the existing grid, we could face a 2005 style blackout, or roaming blackouts. You mentioned once that
When former Secretary Richardson made that comment it was cute but not accurate. Our grid is among the most robust in the world. It is old. But so am I. If you’re well cared for, you can continue to work and work well. Last year, the investor-owned utilities put about $10 billion to work on the interstate transmission grid. But Ed Hill, who runs the International Brotherhood of Electrical Workers, is right, we need to continue to put that capital to work. American Electric Power and the 130 or so investor-owned utilities across this country take this obligation – to ensure that the lights stay on – very seriously.
In signing the American Recovery and Reinvestment Act, President Obama will ramp up funding for renewable energy, but the dirty little secret about renewables like wind power is that it requires an expensive grid to take power from where the windmills are generating it, presumably in the center of the country if Boone Pickens has his way, to either coast.
Without question we ultimately need a backbone grid, not only to allow renewables to come into the equation but to minimize the amount of capital that’s put in the next generation fleet to move power around. It will allow us to rationalize how many power production facilities we’ll need. It will allow companies to retire facilities that would require higher investment to maintain in a carbon-constrained environment.
As to how much it’ll cost, transmission usually costs a few million dollars a mile. So you can get to multiple billions of dollars in a hurry. We’ve seen numbers as big as $60 to $80 billion. But it is financeable with private capital. Because it doesn’t come cheap, we would have to do this project by project. It would be impossible to undertake this all at once. For example, the 100-mile line that we did from
Now who would pay for it? It would be the customers who use the kilowatts in the system. But think about this. I used to be CEO of Northeast Utilities, that serves all of Connecticut save New Haven, the western half of Massachusetts and all of New Hampshire save a couple of small parts in upstate New Hampshire. Northeast Utilities has built $2 billion worth of transmission because they have a multistate agreement in the
Given that most of your plants are coal fired and that half of the country’s energy need is met by coal, are you concerned about the heightened political attacks on coal by environmental interest groups and the new administration?It’s very difficult to counter those kinds of campaigns, and everyone has their own ideas about fossil fuels. I would remind people that several decades ago when concern over acid rain was high the industry used technology to capture 90 percent of the sulfur oxides and nitrogen oxides; every decade since, the air has gotten cleaner. Ultimately, we will come up with better technology to capture the carbon. To me, that’s the definition of clean coal. Perfectly clean? No, but there’s no energy source that is perfectly clean. Where do you think the metal that went into the manufacture of windmills comes from? Those who argue that we should shutter all coal plants in the